Housing Bubble Bursting

Caoimhín

Fr0g wrote: »

Prices will continue drop in 2010 due to lower incomes and higher taxes. If interest rates rise in 2011 then there will be further drops if not it will probably bottom out in 2011. But there is nothing to suggest that the market will turn around and shoot back up again. They may rise at 1/2% per year. Personally I think will keep dropping but at a slower pace. Just my opinion.

Now has never been a better time to buy, get on the ladder, invest, dream home, location location etc etc......:D

jmayo

Highly Salami wrote: »

I think a recovery in the global economy (due to economic stimulus by Fed, ECB etc.) will have a knock-on affect in improving Ireland's economy, since we are part of the global economy,
Davy's seem to think so, http://www.breakingnews.ie/business/davy-predicts-end-of-recession-early-this-year-440731.html

As Whizzbang already pointed out Davy's utterances aren't worth the paper they are written on.
After all this is the BOi offshoot, borker to Anglo that were telling everyone days before bank collapses that irish banks were good investments :rolleyes:

Also I would not be so sure that the US economy will recover much, well maybe Obama will print another few trillion dollars with God knows what knock on affects.
I would be very worried with german/mainland Eurozone economies recovering because you will find ECB rates going up.
This will have big blow on Irish debt repayments, pushing more borrowers over the edge and ultimately default.

Anyway just because economy recovers shouldn't mean house prices recover.
And guess what the health of Irish economy should not be based on or measured by what prices houses are. :rolleyes:

Remember we have over supply in market, less rental return/less lending so less investors and the prices are still too high when compared with averge industrial wage.

So price recovery 2010 ? NO

OMD

Bloxham Stockbrokers sem to think property prices will rise this year way above inflation as quoted in todays Irish Times

"PROPERTY PRICES will bottom out in the first half of 2010 and may rise by as much as 10 per cent by the end of the year, managing partner of Bloxham Stockbrokers Pramit Ghose has predicted."

aphex™

OMD wrote: »

Bloxham Stockbrokers sem to think property prices will rise this year way above inflation as quoted in todays Irish Times

"PROPERTY PRICES will bottom out in the first half of 2010 and may rise by as much as 10 per cent by the end of the year, managing partner of Bloxham Stockbrokers Pramit Ghose has predicted."

Did they say what it's based on?

oceanclub

aphex™ wrote: »

Did they say what it's based on?

Previous forecasts by the same:

Combined with evidence of improved sales of new homes over recent weeks this looks like an early signal the housing market is turning: if so, it bodes well for the economy and stockmarket. (March 2008)

http://www.thepropertypin.com/viewtopic.php?f=4&t=7493&start=0

EDIT: I love this quote:

This guy is an analyst?

He reminds me of Eddie Murphy in trading places:
"People buy cornflakes at Christmas"

P.

Fr0g

OMD wrote: »

Bloxham Stockbrokers sem to think property prices will rise this year way above inflation as quoted in todays Irish Times

"PROPERTY PRICES will bottom out in the first half of 2010 and may rise by as much as 10 per cent by the end of the year, managing partner of Bloxham Stockbrokers Pramit Ghose has predicted."

Banks, Stockbrokers, Esate Agents, Government Politicians and all other vested interests will tell you anything to make you buy houses. Practically our entire economy was based on house sales and the recession started in 2007 because of the lack thereof. They don't care if you spend the rest of your lives in negative equity as long as a sale is made. They are not your friends, they do not have your best interests at heart.

If you want to know the truth listen to independent economists and experts like Morgan Kelly and David McWilliams

daltonr

OMD wrote: »

Bloxham Stockbrokers sem to think property prices will rise this year way above inflation as quoted in todays Irish Times

"PROPERTY PRICES will bottom out in the first half of 2010 and may rise by as much as 10 per cent by the end of the year, managing partner of Bloxham Stockbrokers Pramit Ghose has predicted."

Dyslexia is a bitch. Someone should explain to them that
Bollox has two l's two o's and no 'ham'.

-Rd

jmayo

aphex™ wrote: »

Did they say what it's based on?

A dead cat me thinks :rolleyes:

Magnet

Dunno if this is already posted cos I`ve just skimmed through 2 yrs of this thread but here`s the latest from Morgan Kelly
I strongly suggest a cuppa cos its long..

http://www.ucd.ie/t4cms/wp09.32.pdf

bangersandmash

Magnet wrote: »

Dunno if this is already posted cos I`ve just skimmed through 2 yrs of this thread but here`s the latest from Morgan Kelly
I strongly suggest a cuppa cos its long..

http://www.ucd.ie/t4cms/wp09.32.pdf

Well worth a read.

Should lending criteria return to their late 1990s standards, our results indicate that the prices of new houses and commercial property will return to an equilibrium two thirds below their peak levels, with larger falls possible for secondhand property. This means that, supposing residential prices have already fallen 40 per cent from peak, prices still have to fall by about half from their present levels. Were prices then to grow in line with real incomes, at around 2 per cent per year, it will take about 50 years for real prices to return to their 2006 peaks.

bangersandmash

Instead of access to actual sale price information like other countries, we have the equivalent of car salesman self-reporting on car sales, and telling us that a lack of sales is indicative of a strong future demand :rolleyes:

According to the latest annual survey of almost 1,500 members of the Irish Auctioneers and Valuers Institute (IAVI), sales of residential properties were virtually non-existent for most of 2009. The IAVI believes that prices are now close to hitting “rock bottom” in some parts of the market.

http://www.irishtimes.com/newspaper/finance/2010/0113/1224262208510.html

Ponster

Just spotted this on finfacts....

International study shows Irish housing affordability up but only affordable markets are in US and Canada

Caoimhín

Euroland wrote: »

1) The last month seasonally-adjusted unemployment increased only by 600 people, while unadjusted unemployment decreased. The unemployment rate remains the same (12.6%) for the second consecutive month.

http://www.rte.ie/news/2010/0203/liveregister.html

Live Register figures for January published this morning show an increase of just over 13,300 people signing on compared with December.

The number of people signing on in January was 436,936.

How do you make you economic predictions Euroland? Reading the entrails of goats?

Guell72

jmayo wrote: »

As Whizzbang already pointed out Davy's utterances aren't worth the paper they are written on.
After all this is the BOi offshoot, borker to Anglo that were telling everyone days before bank collapses that irish banks were good investments :rolleyes:

Also I would not be so sure that the US economy will recover much, well maybe Obama will print another few trillion dollars with God knows what knock on affects.
I would be very worried with german/mainland Eurozone economies recovering because you will find ECB rates going up.
This will have big blow on Irish debt repayments, pushing more borrowers over the edge and ultimately default.

Anyway just because economy recovers shouldn't mean house prices recover.
And guess what the health of Irish economy should not be based on or measured by what prices houses are. :rolleyes:

Remember we have over supply in market, less rental return/less lending so less investors and the prices are still too high when compared with averge industrial wage.

So price recovery 2010 ? NO

And dont forget property taxes to come, taxes on investors, less tax relief for investors. Who in their right mind would invest in property with all that extra charges.

dtipp

Heard an estate agent on tv the other day saying he was sure property prices had bottomed out and ppl were now realising that now was the best time to buy.

Almost sure he's the same guy I saw about a year ago saying exactly the same thing.

Why are they never challenged on this.
Where are 'experts' that said as far back as late 2008 that prices wouldn't drop any further?

dtipp

dtipp wrote: »

Where are 'experts' that said as far back as late 2008 that prices wouldn't drop any further?

Keeping their heads down now, or still working at the estate agents office!



or fighting bankrupcy

jmayo

Deleted User wrote: »

Keeping their heads down now, or still working at the estate agents office!



or fighting bankrupcy

Working in an estate agents office would be exageration, more like reading the paper and surfing the net.

leonardjos

Deleted User wrote: »

Keeping their heads down now, or still working at the estate agents office!

or fighting bankrupcy

You would think so, but they have short memories and no shame!

Me and my money: John McGuire
'I bought my first house in '96 for €80,000. My friends thought I was mad to spend so much '

John is back in the spotlight boasting of his canniness and saviness, and proclaiming that now is the time to buy everything!

There are tremendous investment opportunities at the minute. This is the time to buy everything.

"Cash is king now, more so than I have ever seen."

John McGuire is chairman of insurance provider www.quotedevil.ie and a former presenter of RTE2's property show 'I'm An Adult Get Me Out of Here'.

highgiant1985

I'm interested in how people think the abolishing of the TRS in the future will impact on housing prices?

Calina

Same impact as increasing interest rates: reduce the amount of money people can borrow.

Downwards pressure in other words.

ChicagoEoin

interesting to read back on this post today

JOHNPT

My sister is considering buying a house in Drumcondra area. What are peoples opinions now? Surely houses prices have fallen alot over last year and are good value now. Also there is not a big oversupply of houses in central Dublin so house prices here wont fall as much as places like Leitrim or Kildare. 250,000 for a 2 or 3 bed within 20 mins walk to city centre seems like good value to me. Would be interested in peoples opinion.

Caoimhín

JOHNPT wrote: »

My sister is considering buying a house in Drumcondra area. What are peoples opinions now? Surely houses prices have fallen alot over last year and are good value now. Also there is not a big oversupply of houses in central Dublin so house prices here wont fall as much as places like Leitrim or Kildare. 250,000 for a 2 or 3 bed within 20 mins walk to city centre seems like good value to me. Would be interested in peoples opinion.

They are cheaper, not cheap.

Please go back to the, old equations of yield from rental or % of income.

Why, why, why would one consider giving ones life earnings to a concept of "value" versus bubble prices.

I have many builder friends who insist that a house/dwelling can not be sold for less than it cost to build, however, every day i meet farmers and craftsmen who bought calves/timber for a sum, reared/created a product that is NOW worth less than the initial outlay.
THEY accept the fact that they will have to sell at a loss...

Guell72

highgiant1985 wrote: »

I'm interested in how people think the abolishing of the TRS in the future will impact on housing prices?

I dont think TRS will be abolished at all.
I bet it goes back to 100% for investors soon too.

Blackjack

Guell72 wrote: »

I dont think TRS will be abolished at all.
I bet it goes back to 100% for investors soon too.

Of course. But why, pray tell?

Guell72

Blackjack wrote: »

Of course. But why, pray tell?

This or the next government will soon realize that they are better off with a moving property market than a stagnant one.

Remember they dont care about you or I being able to afford a house. They just want anyone at all to start buying, to boost the coffers. Also the more a house is worth, the more property tax they get from it (unless its a fixed tax).

Houses are now much more affordable than they were for many years. So the trigger is almost there.

They also need to get rid of the oversupply (which has no economic benefit to the state), to get the construction sector moving again. Creating jobs and getting tax in and people off the dole (The WPP schemes will probably get in the way of this though - why would anyone pay someone when they can get workers for free - but thats another argument).

So to get it moving the easiest way is to interest buyers, including investors.

Attract buyers by :
Abolish (or more likely reduce) stamp duty in favour of a property tax.
Keep the TRS so people benefit from buying.
Probably give TRS to second, third time buyers too to get some churn going.


Attract investors by :
Allowing deduction of 100% on interest. Investors arent going to risk it if they cant cover their expenses. And with only 75% interest relief and the threat of even less hanging over it, they wont be interested at all.


They will most likely abolish TRS on rent anyway, because this as a tax relief is just waste. There is no need for an incentive for renting at all. ( €400 per year for every tax paying renter in the country adds up).


While we all might think that the current situation, providing cheap rents and cheaper houses is great, the government will not. They will want to get the wheels moving again asap, so they will need to oil them.

Caoimhín

Guell72 wrote: »

Remember they dont care about you or I being able to afford a house. They just want anyone at all to start buying, to boost the coffers. Also the more a house is worth, the more property tax they get from it (unless its a fixed tax).

You are right up to a point, however i cant see the ECB or Brussels allowing our misfit government to follow their daft economic policy based on building and selling houses to each other. Remember, they are bailing the gob****es out after the last disaster.

Guell72

Caoimhín wrote: »

You are right up to a point, however i cant see the ECB or Brussels allowing our misfit government to follow their daft economic policy based on building and selling houses to each other. Remember, they are bailing the gob****es out after the last disaster.

Europe will be happy as long as there is movement in the construction sector. It doesnt have to be bubble style, just get it moving enough to earn revenue from it and create jobs.
A dead property sector is no good to anybody.

Duckjob

Guell72 wrote: »

Europe will be happy as long as there is movement in the construction sector. It doesnt have to be bubble style, just get it moving enough to earn revenue from it and create jobs.
A dead property sector is no good to anybody.

The main reason the property sector is still dead is because so many sellers are still deep in denial as regards what they can expect to sell their property for.

There's still plenty of willing potential buyers out there, but as long as you can see bog-standard 3 bed semis in bog-standard parts of Dublin asking 350K+ you know you're still stuck inside the matrix.

Guell72

Duckjob wrote: »

The main reason the property sector is still dead is because so many sellers are still deep in denial as regards what they can expect to sell their property for.

There's still plenty of willing potential buyers out there, but as long as you can see bog-standard 3 bed semis in bog-standard parts of Dublin asking 350K+ you know you're still stuck inside the matrix.

You can see them for a lot less than that.

Im not arguing the rights and wrongs here or even what any property is worth. Im just offering my predictions of what will happen next. I think whichever government is in power will want to get property moving. Everything they have done so far has put the breaks on. The will realize what they need to do to get it moving and will act.

I have a little inside info on some discussions going on now and this seems to be what is being planned.